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Friday 16 January 2009

When Barack Obama steps into the White House next week the US government will already be almost four months into the current 2009 fiscal year, which began October 1. Last week the Congressional Budget Office forecast the 2009 deficit at nearly $1.2 trillion, swamping the previous record of $455 billion set in 2008. (Bush already owns the five largest federal budget deficits of all time, not including 2009, after inheriting the largest budget surplus in US history.) The CBO assumes the US economy will decline by 2.2% in 2009. But the CBO estimate doesn’t include spending for the wars in Iraq and Afghanistan (which the Bush administration has treated every year as if it was some kind of surprise that couldn’t have been anticipated). And it doesn’t take into account any economic recovery program – no tax cuts or spending increases to stimulate the economy. So add another $500 billion or so to the deficit number — $1.7 trillion. daggatt

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